The municipal bond market on Thursday is working off the heavy supply that hit the screens on Wednesday when more than $4.5 billion of new issues were priced.
Traders said the biggest deal of the week, the $1.681 billion Texas Transportation Commission's Central Texas Turnpike System revenue bonds was oversubscribed and got a good reception from investors.
"It looks like the market was waiting and anticipating this deal coming to market, one reason why it was so well received," the Texas trader said. "Overall everything was oversubscribed."
The deal was priced by Barclays Capital and consisted of $225 million first-tier revenue refunding put bonds, $291.753 million of first-tier revenue refunding bonds, and $1.164 billion second-tier revenue refunding bonds.
Primary Market
Washington state sold four separate deals of general obligation bonds totaling over $1 billion. The $458.76 million various purpose GO refunding bonds were won by Bank of America Merrill Lynch with a true interest cost of 2.6686%. The $281.750 million of various purpose GOs were won by Morgan Stanley with a TIC of 3.3662%. The $200.63 million of vehicle fuel tax GOs were also won by Bank of America, with a TIC of 3.2649%. The $59.205 million of taxable GOs were won by Wells Fargo Securities with a TIC of 1.5819%.
The $111.935 million Horry County School District, S.C.'s GO refunding bonds were won by Morgan Stanley with a TIC of 2.4999%.
In the negotiated sector, JPMorgan priced the East Bay Municipal Utility District, Calif.'s $442.055 million of water revenue bonds for retail investors.
RBC Capital Markets priced the Michigan Finance Authority's $398.44 million of hospital revenue refunding bonds.
JPMorgan priced $400 million of Connecticut Health and Educational Facilities Authority revenue bonds for Yale University.
Morgan Stanley priced the Alabama Federal Aid Highway Finance Authority's $533.18 million of special obligation revenue bonds.
JP Morgan priced the Washington Health Care Facilities Authority's $267.35 million revenue bonds for the Seattle Children's Hospital.
Secondary Market
Treasury prices were weaker on Thursday, with the two-year note yield unchanged at 0.50% from Wednesday. The 10-year yield was up to 1.88% from 1.84%, while the 30-year yield rose to 2.49% from 2.42%.
On Wednesday, prices of high-quality municipal bonds fell. The yield on the 10-year benchmark general obligation increased four basis points to 1.80% from 1.76% on Tuesday, while the yield on 30-year GOs rose five basis points to 2.59% from 2.54%, according to the final read of MMD's triple-A benchmark scale.
The 10-year muni to Treasury ratio fell to 97.0% on Wednesday from 97.7% on Tuesday, while the 30-year muni to Treasury ratio slipped to 106.0% from 106.1%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,368 trades on Wednesday on volume of $7.661 billion.
Most active on Wednesday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bond, Series AA 4 1/4s of 2044, which traded 84 times with an average price of 103.472 and an average yield of 3.807%.
